PROJECT SUMMARY/ABSTRACT As a strategy to gain insight into the mechanisms of cancer initiation and progression, we have studied the proliferative response to injury and its relationship to malignant growth, with the urinary bladder as a major focus. Bladder cancer is the fourth most prevalent cancer in men, twelfth in women, and invasive bladder cancer is uniformly lethal left untreated. Local surgical excision is often followed by recurrence: this and the high risk of progression together require constant monitoring, a major contributor to the cost of bladder cancer treatment, which is the highest per patient for any cancer. Our recent work has shown that basal Sonic hedgehog (Shh)-expressing cells of the bladder epithelium (urothelium) function as stem cells that support the repopulation and renewal of all urothelial cell types in response to bladder injury such as that caused by urinary tract infection (UTI). This injury response is triggered by increased Shh protein production from basal stem cells of bladder epithelium, which in turn triggers production of Wnt and Bmp proteins in subjacent cells of the stroma; these stromal niche signals in turn drive proliferation and differentiation of urothelial stem cells and their progeny. We also showed that Shh- expressing basal stem cells are the cell-of-origin for the most lethal form of bladder cancer, invasive urothelial carcinoma (IUC), and for its epithelially-confined precursor lesion, carcinoma in situ (CIS). During the previous award period we made the surprising discovery that the CIS lesion, although epithelially-confined, can spread throughout the entire urothelium by clonal expansion of a single basal stem cell, indicating the aggressively proliferative nature of CIS cells. We also found that Shh-induced stromal signals that promote terminal urothelial differentiation constitute the major barrier to progression from epithelially-confined to invasive disease (CIS to IUC). In the current proposal, we aim to: (i) characterize the tissue dynamics and regulatory basis of transient vs. persistent proliferative states in injury response as compared to carcinoma in situ; (ii) identify the regulatory signals that control terminal differentiation of bladder epithelial cells; and (iii) characterize the genetic and epigenetic changes underlying the loss of differentiation- inducing signals during progression from non-invasive to invasive disease (CIS to IUC). This work will provide the basis for improved diagnosis of CIS and may provide targets for suppression of the persistently proliferative state of CIS cells. In addition, this work may provide the basis for blocking progression to invasive disease by administration of pro-differentiation signals, potentially including FDA- approved drugs such as FK506 and retinoic acid, or by blocking or reversing the changes that underlie the loss of differentiation signal production. This work may extend beyond bladder cancer to other endodermal malignancies, such as pancreatic ductal adenocarcinoma and colon adenocarcinoma, in which Shh-induced stromal signals also restrain cancer growth.